Why Every Business Owner Should Commit to Closing the Gender Pay Gap

Why Every Business Owner Should Commit to Closing the Gender Pay Gap

As of 2022, women earn 82 cents for every $1 men make. Even though the gender pay gap had been steadily closing since 2015, the coronavirus pandemic and its numerous, complex consequences sadly slowed this process. 

The pandemic only heightened the still-prevailing social expectations toward women. They are paid less as they are more likely to leave employment to become mothers or caretakers. Going back to work after maternity leave, for example, is also harshly penalized by lowering wages due to professional inactivity.

Moreover, the gap is even greater for women of color.

While we undoubtedly need systematic changes and relevant legislation, we should work on the individual level as well. It’s not only the right thing to do – it’s also more beneficial from the business point of view.

Below, we get into more detail on why you, as a business owner, should commit to closing the gender pay gap for reasons going beyond one of your workers potentially contacting an equal pay lawyer.

Controlled Pay Gap vs. Uncontrolled Pay Gap

The uncontrolled pay gap is a comparison of all working men and women, and it’s the 82:100 ratio mentioned above.

However, there’s also another indication that’s necessary to take into account – the controlled pay gap. It compares the earnings of men and women with similar experience and qualifications, and it comes out at 99:100 – close but still not equal. Moreover, it doesn’t consider some significant factors, like the fact that women are the great majority among those performing domestic work and care. 

discrepancy in gender pay gap

Additionally, many people, especially those defending the rationality of the pay gap, still don’t recognize the importance of unpaid domestic work. In fact, it’s valued at 10-39% of the Gross Domestic Product, which actually contributes as much or even more to the economy than industries like commerce, manufacturing, or transportation.

Women undertake the work that provides them with no direct remuneration, and they still get penalized for it.

Closing the Gender Pay Gap Is in the Best Interest of Everyone

McKinsey and Company found that closing the gender pay gap could add $12 trillion to the global GDP, helping the economy and society to flourish.

But it’s also beneficial on the individual level. According to research, inclusive companies that actually work toward eliminating gender inequalities make better business decisions up to 87% of the time. Another study showed that organizations with diverse executive bodies often have higher profits and increasing longer-term value.

Moreover, implementing the gender equality policy in your company will work wonders for your reputation, too. Not only will you be able to attract more socially-aware customers who are more likely to stay loyal to your business, but you will also present your company as a healthy, supportive environment to work in. This means that you may be able to choose among the best candidates (of any gender) for any future opening in your organization.

Taking the first steps toward gender equality starts with you.

A Well-Paid and Well-Treated Employee Is a Productive Employee

It’s not only about fairness. It’s also about competence, motivation, and performance. An underpaid worker is often unhappy, disgruntled, and unmotivated. Such a worker is likely to be less productive and more prone to mistakes and errors.

man and woman working together

Wages are not just the way we show our appreciation for someone’s work – they also signal their importance to the company as well as their potential for development. They also signal what kind of values we believe in, including how much importance we place on merit, equality, and everyone's well-being.

What Can You Do as a Business Owner?

Conduct an Audit

Take a look at your employees’ salaries and analyze the data taking into account their experience, qualifications, and seniority. A pay gap is not necessarily an indication of discrimination – it can be a result of taking different career paths without women having the same opportunities as men. 

The pay gap reflects the fact that women are more likely to end up in low-paid jobs, but they also become more likely to leave these jobs and take time off when they become parents or caretakers. This is also why women are more likely to take on part-time employment.

Reevaluate Your Promotion and Hiring Policies

If you currently have a glass ceiling, try to find out why. It could be as simple as a lack of childcare facilities or a culture that doesn’t encourage women to take on higher positions. You can also look into your performance evaluation process to ensure that it isn’t biased against women. One way to do this is by having a committee review the performance of your employees instead of just relying on the opinion of one manager. 

gender pay gap

Create an Inclusive Environment

Try to create an environment in which everyone feels comfortable and safe so that they can pursue their careers without having to worry about discrimination or harassment.

Add Equality to Your Core Values and Goals

This will help you to reinforce the importance of equality in your company. It also shows employees that you really mean it and that you’re not just paying lip service. If you want to create a better business, you’ll need to take action. You can’t just rely on the government to make a change – you have to be proactive.

Help Your Employees Manage Work-Life Balance Effectively

This is especially important for working mothers, who often feel pressured to choose between their careers and their families. Many also have to deal with the double burden of paid employment and domestic work. 

man working from home while drinking coffee

Train Your Employees

Equal opportunity training will help you ensure that everyone in your company is aware of their rights and obligations and the laws protecting them. It will also help to create an environment where everyone – both men and women – feels safe and secure. They can speak out if they see or experience discrimination.

The Bottom Line

The gender pay gap is real. It’s unfair, it’s detrimental to both women and men, and it’s something we can’t ignore. It’s a question of equality, fairness, and respect for women – but it’s also about business. 

We need to stop seeing the pay gap as a natural or inevitable phenomenon. It’s not – it’s a product of our society and social beliefs.

As a business owner, you can make changes in your company that will help you close the gender pay gap. This way, you’ll improve the lives of your employees and make them happier. This also means that you’ll have a more productive, motivated, and profitable workforce and better business results.

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